The Central Bank’s decision to lower the key rate to 18% has sparked hope for cheaper mortgages and loans among Russians, but experts caution that the path to real financial relief may be longer than expected. While the rate cut signals progress in combating high costs, significant factors could delay the return of affordable loans.

The main driver behind the Central Bank’s move is the noticeable slowdown in inflation, which has fallen to 9.2% annually, with even a weekly deflation recorded in mid-July. This has given the regulator confidence that its tight monetary policy is working, allowing for cautious easing.

Despite the positive signs, concerns remain about the potential for inflation to accelerate again, especially with seasonal indexation of housing and communal services tariffs, a weakening ruble, or new geopolitical sanctions. This could force the Central Bank to halt or reverse its easing cycle, keeping interest rates high for an extended period.

Experts emphasize that the return of acceptable mortgage rates, around 12%, is unlikely to happen quickly. One analyst predicts this could occur by the summer of 2026, while another believes it may be possible by the end of next year.

A gradual decline in mortgage rates is expected, with banks responding to the Central Bank’s signals while remaining cautious. Consumer and car loans will likely react later and more modestly due to concerns about the solvency of the population.

Inflation remains a key limiting factor, and the Central Bank will need to maintain a tolerably high rate until it is consistently low and expectations of businesses and Russians decrease. This means that a significant reduction in loan costs, noticeable in family budgets, will require time and patience.

Analysts suggest that a return to acceptable key rates and increased lending will not necessarily accelerate inflation. They argue that inflation was primarily driven by the devaluation of the dollar and high import components in the cost of goods.

To avoid inflation, experts suggest maintaining compliance with the credit multiplier ratio, ensuring the money supply corresponds to the volume of GDP, and fostering economic growth. They believe that military spending contributed to inflation, so a decrease in such spending should help stabilize the economy.

The reduction in the Central Bank’s rate is just the beginning, and a real reduction in loan costs will not happen immediately. Russians should prepare for a gradual improvement in lending conditions rather than a rapid revolution in rates.